The second tranche of bonds under the Gold Bonds scheme uneveiled last year by the government was launched on Jan 18 and will be open for subscription till Jan 22. The bonds will be issued on February 8 and will carry an interest rate of 2.75 per cent payable on the initial amount of investment.

The bonds are being sold through banks, Stock Holding Corporation of India (SHCIL) and designated post offices, and have been priced at a rate of Rs 2,600 per gm. That is lower than the current market price of gold which has risen following the recent turmoil in global stock markets.

The RBI, in a release has said that the second tranche issue will be kept open only for five days. It is believed that this will ensure that the rate remains attractive, as at the time of the first tranche, the gold price had dipped below the bond offer price before the scheme closed.

The government has also  launched a major media campaign to promote the issue covering All India Radio and FM radio, as well as print media. It is also launching a mobile SMS campaign.

Clarification that the bonds can be used as collateral for loans with a loan-to-value ratio being equal to ordinary gold loans mandated by RBI from time to time, is expected to make the scheme more attractive to inestors.

Last month, the RBI had said that the first tranche of the scheme attracted deposits worth Rs.246 crore. A total of 62,169 applications were received and the for 916 kg of gold.